The University Health System became an Accountable Care Organization Jan. 1, a designation newly created under the Affordable Care Act. An ACO is a network created to coordinate care between doctors and hospitals in an effort to lower Medicare costs. Each ACO is responsible for at least 5,000 Medicare patients, according to the Center for Medicare Services.
More than a year ago, a University steering committee of administrators, physicians and other hospital members decided to form their own ACO instead of joining a pre-existing one because of timing and logistical concerns, said Dr. Dan McCarter, interim medical director of the Well Virginia ACO.
The main advantage of an ACO is improved communication, in addition to possibly reducing costs for unnecessary tests and procedures, McCarter said.
“We have a patient that gets part [treatment] from us, part from Martha Jefferson Hospital,” McCarter said. “By sharing information with us, we can see that they had a colonoscopy at Martha Jefferson, so we won’t order another colonoscopy.”
Patients do have the option to opt out of sharing information if they prefer, McCarter said.
As an ACO, the health system must meet 33 quality metrics under four domains, including patient experience, patient safety, preventive health care and treatment of at-risk populations.
The University is not penalized if it is unable to save money using this system, but McCarter said if the health care system abides by these quality metrics and costs decline by more than 2 percent, the University can share the savings with the medicare services center.
Assoc. Economics Prof. Amalia Miller, who specializes in health economics, said in an email that the economic impact of the decision is not yet clear.
“My view is that the economic effects of ACOs are uncertain, but there are good reasons to think that they could help reduce waste and improve patient outcomes, so they are policy worth trying,” Miller said.
According to data from the Department of Health and Human Services, the University’s health system is one of the 123 new ACOs that have been formed this year.
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